Joblessness up in metro areas

Layoffs tied to the troubled housing and autos industries clobbered the West and Midwest in May and helped raise unemployment rates in all the largest metropolitan areas for the fifth straight month.

All 372 metro areas saw joblessness rise in May from a year earlier, the Labor Department reported Tuesday. The highest rates -- of at least 15 percent -- were concentrated in metro areas in California, Michigan and Indiana.

Companies likely will remain reluctant to hire back workers even if the recession ends later this year as many expect. That means the unemployment rates in most metro areas probably will rise in the months ahead -- a potential obstacle to a hoped-for recovery.

"The themes that are dominating this worsening labor market are problems in housing and autos, which have forced companies to cut jobs," said economist Ken Mayland, president of ClearView Economics. "Unfortunately, there are still more layoffs to come."

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Employment at factories, construction companies, retailers and financial services has been especially hard hit by the recession, which started in December 2007 and is the longest since World War II.

Kokomo, Ind., a manufacturing hub, suffered the biggest gain in unemployment in May. Its rate zoomed to 18.8 percent, up 11.7 percentage points from a year ago. Much of the loss came from furloughs at four Chrysler plants that had been shut down as part of the auto company's bankruptcy proceedings. Local government leaders want to diversify the area's economy and attract other industries to employ out-of-work engineers, technicians and others.

The second-largest increase occurred in Indiana's Elkhart-Goshen, where the rate rose to 17.5 percent. That's up 11.4 percentage points from a year earlier. Layoffs at RV makers Monaco Coach Corp., Keystone RV Co. and Pilgrim International have taken a big bite out of area employment.

Bend, Ore., saw its jobless rate rise to 15.2 percent, an increase of 8.8 percentage points, the third-largest in the country. It's been the center of the central Oregon real estate and construction boom, powered by retirees from California. But the credit crisis and falling home prices made it harder for them to cash out of their existing homes and move. The area also has suffered from job losses in construction, retail and in the services sectors.

And North Carolina's Hickory-Lenoir-Morganton saw its unemployment rate rise to 15.4 percent, a gain of 8.5 percentage points. About one-third of all jobs in Hickory are at manufacturing plans. Furniture makers and textile producers for years have been shifting work to low-cost overseas producers, and the region has struggled to find other employers to help broaden its economic base.